Supply and demand graphs: equilibrium, shifts, price ceilings and floors, taxes and surplus
Supply and Demand draws a market’s demand and supply curves crossing at equilibrium, with the equilibrium price and quantity marked at the axes as Pₑ and Qₑ or P* and Q*. Shift demand, supply or both and it draws D₁ and D₂ or S₁ and S₂, arrows between them, and the old and new equilibrium, with P₁, P₂, Q₁ and Q₂ at the axes. Add a binding price ceiling with the shortage it causes, or a price floor with its surplus, the quantity demanded and quantity supplied marked at the axis; or a per-unit tax or subsidy, with the price buyers pay, the price sellers keep and the quantity sold. Shade consumer surplus, producer surplus, deadweight loss and tax revenue, and make either curve steep (inelastic), flat (elastic), perfectly inelastic or perfectly elastic.
Teachers use it for questions on tests, worksheets and slides. Graphs start schematic, straight lines with no numbers, the way AP Microeconomics graphs are drawn, or can be numbered from a schedule of prices with the quantity demanded and quantity supplied at each, so students can read the equilibrium, a shortage or the tax incidence off the axes. Every label can be written, left as a blank line for students, or left off, and graphs print in color or black and white.
What you can set
- Eleven common setups, from market equilibrium, an increase in demand and a decrease in supply to a price ceiling, a price floor, consumer and producer surplus, a per-unit tax with deadweight loss, perfectly inelastic supply and a numbered gasoline market
- Schematic axes with each curve normal, steep (inelastic), flat (elastic), vertical (perfectly inelastic) or horizontal (perfectly elastic), or numbered axes drawn through a schedule of prices, quantities demanded and quantities supplied, with a dot at each row
- A shift in demand, supply or both, each an increase or a decrease and small, medium or large, with none to three arrows from the old curve to the new
- A price ceiling or price floor at any price, with a brace marking the shortage or surplus
- A per-unit tax or subsidy of any size, drawn as a dashed S + tax or S − subsidy curve
- Shading for consumer surplus, producer surplus, deadweight loss, and tax revenue or the cost of a subsidy
- Dashed lines to the axes with the prices and quantities, equilibrium values named Pₑ and Qₑ or P* and Q*, and every label written, a blank line for students, or left off, all at once or one at a time
- The chart and axis titles (or blank lines), color or black and white, arrows or other ends on the axes, label size, and on numbered graphs the axis ranges, fitted or typed, and gridlines
Copying, printing and sharing
Copy the figure straight into a test, worksheet or slide, or download it as a PNG or SVG. Printing the page prints
just the figure. Share link copies the page’s address with your settings in it, so anyone who opens it sees this
exact figure, and presets save settings you use often in your browser. It’s free, with no sign-up.
Frequently asked questions
How do you show a price ceiling on a supply and demand graph?
A price ceiling is a legal maximum price. It only binds below the equilibrium price: there, buyers want more than sellers will sell, so the quantity demanded Qd is greater than the quantity supplied Qs, and the gap is a shortage. Only Qs is sold, so the triangle between the curves from Qs to Qₑ is deadweight loss. Under Price control choose Ceiling and slide the price below equilibrium; Brace the shortage marks the gap, and Deadweight loss under Shading shades the triangle. A ceiling at or above equilibrium doesn’t bind, and the page says so.
What is the difference between a shift and a movement along the curve?
A change in the good’s own price moves the market along a curve: a change in quantity demanded or quantity supplied. A change in anything else, like income, tastes or the price of a related good for demand, or input costs or technology for supply, shifts the whole curve: a change in demand or supply. Under Shift choose what shifts, whether it increases or decreases, and how far; the graph draws D₁ and D₂ (or S₁ and S₂) with arrows between them, and the market moving along the other curve from E₁ to E₂.
What happens when supply and demand both shift?
One of price or quantity changes in a known direction and the other depends on which shift is bigger. If demand increases and supply decreases, the price rises for sure, but the quantity rises only if demand shifts more than supply. Under Shift choose Both, set each direction, and change How far demand shifts and How far supply shifts to show each case; when the new quantity matches the old one the axis reads Q₁ = Q₂.
How do you graph a per-unit tax and show who pays it?
A per-unit tax on sellers shifts supply up by the amount of the tax. The quantity sold falls to Qt, buyers pay a higher price Pb, sellers keep a lower price Ps, and the gap between them is the tax. Tax revenue is the tax times Qt, and the triangle between the curves from Qt to Qₑ is deadweight loss. The side of the market that is more inelastic pays more of the tax. Under Tax or subsidy choose Tax and set its size, then tick Tax revenue and Deadweight loss under Shading; make demand Steep (inelastic) to show buyers paying most of it.
How do you shade consumer and producer surplus?
Consumer surplus is the area under the demand curve and above the price buyers pay, out to the quantity sold; producer surplus is the area above the supply curve and below the price sellers keep. Tick Consumer surplus and Producer surplus under Shading. They follow the market as it ends up, so with a price ceiling, price floor or tax they shrink to the quantity actually sold, and Deadweight loss shades what is lost.
How do I make a supply and demand worksheet with blank labels?
Under Labels, choose Blank lines for Every label, and each curve, equilibrium point, price and quantity gets a line for students to write on; or set labels one at a time, leaving some written. The Students label a shift (blank labels) setup starts from an increase in demand with every label blank. Set the axis titles to blank lines under Titles, and choose Black and white under Look for a photocopy.
Can the graph have numbers on the axes?
Yes. Graphs start schematic, with no numbers, as AP graphs are drawn. Choose Numbered under Axes and type a schedule: each row a price with the quantity demanded and quantity supplied at it. The curves go through the rows, the axes fit the numbers or can be typed under Numbers, and the panel gives the equilibrium price and quantity, the size of any shortage or surplus, and with a tax what buyers pay, what sellers keep and how much is sold. A ceiling or floor price and a tax per unit are typed as numbers.
Econ Figures Supply and Demand